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Employers Take Heed: Unreasonable Contest Counsel Fees Awarded For Untimely Filing of a Medical-Only Notice of Compensation Payable

November 17, 2021
November 12, 2020

In Gabriel v. WCAB (Procter and Gamble Products Company), the Commonwealth Court of Pennsylvania held that unreasonable contest counsel fees can be awarded for failure to issue a Notice of Compensation Payable acknowledging a claim for which they had timely notice.

In Gabriel, the claimant filed a Claim and Penalty Petition and made a request for unreasonable contest counsel fees after he sustained a puncture wound to his left upper arm.  The claimant timely reported the incident to his employer and the employer paid the claimant's medical expenses without issuing a medical-only NCP within 21 days.  The employer also filed an Answer to the Claim Petition denying all allegations therein.  Early on in the proceedings, counsel informed the workers’ compensation judge that although he did not have a report from a medical doctor regarding the injury, the Claim Petition was filed solely because the employer never formally accepted the claim.  After paying for the claimant's medical treatment, the employer merely closed the claim because the claimant had not sought any treatment after the initial treatment, which resulted in the need for a second hearing and the claimant’s testimony.  A third hearing was held at which time the claimant submitted a medical report indicating that he sustained a “laceration to branches of the posterior cutaneous nerve,” suffering permanent loss of sensation in the posterior elbow region.  At the final hearing, the employer indicated that it would be willing to stipulate that the claimant sustained injuries consistent with the medical report; however, the claimant refused to resolve the Claim Petition based on the failure of the employer to issue a medical-only NCP.  Over a year after the work injury, the employer filed a medical-only NCP.

The WCJ granted the Claim Petition but did not award a penalty or unreasonable contest counsel fees.  The WCJ reasoned that although the NCP was untimely issued, the employer did pay the claimant’s medical bills and the claimant failed to produce any medical evidence describing a specific injury until the final hearing.  The WCAB affirmed on the basis that the WCJ did not abuse any discretion in not awarding penalties or unreasonable contest counsel fees.  The WCAB pointed out further that the claimant sought to include more than a puncture wound in his Claim Petition.

The Commonwealth Court overturned the WCAB ruling on the unreasonable contest counsel fees and remanded the matter to the WCJ to determine the amount of the fees.  The court reasoned in essence that had the employer issued a timely medical-only NCP, the parties would not have had to appear at any hearings, unlike in previous cases where the issuance of an NCP would not have prevented the parties from having to litigate any issues.  Because the NCP was not issued, the claimant had to file a Claim Petition within three years of his work injury in the event he had recurring conditions related to his work injury.  It further pointed out, among other things, that the claimant was not alleging any additional injuries other than numbness relative to the laceration to the cutaneous nerve.  The employer violated the Act by failing to issue an NCP within 21 days.

While there were numerous factors in Gabriel that led to a ruling that the employer had unreasonably contested the claim, the case highlights the importance of being vigilant when claims arrive and impressing upon employers to issue the appropriate bureau document, accepting the claim where there is no basis to contest that an injury occurred.  Moreover, the employer's counsel should be careful not to include a full denial of the Claim Petition allegations when filing an answer.  The Answer to the Claim Petition should be consistent with the actions taken by the employer to pay the claimant's workers' compensation benefits where an actual injury occurred.